A/HRC/23/37 increase their poverty-reducing expenditure.15 For the 36 post-decision point HIPCs, the average poverty debt service payment relative to GDP has dropped from 2.9 per cent of GDP in 2001 to 0.9 per cent of GDP in 2011. 16. It is, however, not easy to measure the direct fiscal impacts of debt relief. 16 A decision to cancel a given nominal amount of debt does not necessarily result in an immediate cash flow gain. These may arise over time. Further, although the reduction in debt service payments may have contributed to improved social indicators, it may not be the main avenue through which these reported improvements have occurred. Other factors have also contributed to the reduction in debt payments, including higher prices for commodity exports, robust economic growth and increased government revenue. The experience of the Plurinational State of Bolivia appears to support this view. 17. Bolivia first had some debt cancelled under the HIPC Initiative in 1998, then again in 2001. According to a recent report by Jubilee Bolivia (Fundación Jubileo), this debt relief made little reduction in the total level of debt. The amount of debt increased between 1998 and 2005, with debt payments peaking in 2005 and only falling after further debt relief. The report indicates that there has been a noticeable reduction in poverty and inequality since 2007, along with improved social and economic outcomes. The proportion of the population living in extreme poverty fell to 26 per cent in 2009 and there has been an improvement in health and social outcomes. The country has also experienced robust economic growth, with GDP per capita rising from $1,000 in 2005 to $2,000 in 2010. 18. Debt savings from 2005 have been correlated with higher prices for the country’s hydrocarbon and mineral resources. Although the Government’s external debt has increased by $700 million since 2007, it has continued falling as a percentage of GDP due to economic growth. In contrast to other HIPCs, Bolivia has had a trade surplus since debt relief, averaging 1.7 per cent of GDP since 2006 (compared to a deficit of 3.7 per cent from 1997 to 2005). All other post-completion point HIPCs have continued to record trade deficits 19. It is also important to note that some countries which had substantial arrears to multilateral institutions before entry into the HIPC Initiative actually saw their debt service costs rise by joining the initiative. The reason for this is that one of the conditionalities of the HIPC Initiative was that all arrears to multilateral creditors be cleared before decision point. This was an enormous problem for a number of countries such as Burundi, the Democratic Republic of Congo, Guinea-Bissau and Sierra Leone. The arrears were refinanced by grants or bridging loans. In the case of the Democratic Republic of the Congo which had arrears of 80 per cent of total debt (or $10.6 billion) before it joined the HIPC Initiative in 2002, the payments amounted to 20 per cent of government revenue, on average, from 2002 until it completed the initiative in 2010. 20. The World Bank and IMF further report that debt relief “has markedly improved the debt position of post-completion point countries, bringing their debt indicators down below those of other HIPCs or non-HIPCs” and, while recognizing that many remain vulnerable to shocks, particularly those affecting exports as evidenced during the global economic crisis, 15 16 Ibid., p. 3. D. Cassimon and others, “Dynamic Fiscal Impact of the Debt Relief Initiatives on African Heavily Indebted Poor Countries (HIPCs)”, Document de travail DT/2013-01 (Université de Paris Dauphine, January 2013). p. 6. 7